Gold Prices Rise As China Abandons GDP Target For 2020

Gold prices inched higher on Friday as U.S.-China tensions escalated and the Chinese government abandoned setting economic growth target for the first time amid uncertainties posed by the coronavirus pandemic.

Spot gold rose 0.4 percent to $1,734.88 per ounce, after having dropped 1.4 percent on Thursday. U.S. gold futures were up 0.9 percent at $1,736.65.

China’s decision to write a new national security law into Hong Kong’s charter added to concerns over the pace of economic recovery from the coronavirus pandemic.

Republican and Democratic U.S. senators said on Thursday they would introduce legislation to impose sanctions on Chinese officials involved in enforcing proposed new security laws in Hong Kong after last year’s pro-democracy unrest.

The bipartisan legislation would also impose secondary sanctions on banks that do business with entities found to violate the law guaranteeing Hong Kong’s autonomy.

Members of Congress from both parties have been taking a more aggressive tone on China, which has come under the scanner for its alleged role in covering up the initial stages of the coronavirus outbreak.

In another development, the U.S. Senate passed a legislation that seeks to delist Chinese companies who don’t abide by U.S. accounting laws.

China warned that it will safeguard its sovereignty, security and interests, and threatened countermeasures.

Meanwhile, at the annual session of National People’s Congress in Beijing, Premier Li Keqiang said the country will face some factors that are difficult to predict in its development due to the great uncertainty regarding the Covid-19 pandemic and the world economic and trade environment.